The Allentown School District's proposed preliminary budget has a $10.6 million shortfall and the district's savings account is almost tapped out.

Superintendent Russell Mayo gave the school board a glimpse of the 2014-15 tentative spending plan tonight. But he cautioned it is a fluid document that will change many times before the June final adoption.

The numbers are all projections and don't rely on any increase in state education funding. The tentative plan would hike taxes to the maximum 3.2 percent Allentown is allowed per state law before putting the matter to a voter referendum.

The district is expected to launch a budget portal on its website to keep the public informed and to encourage confidence and transparency, Mayo said.

He shared three short videos that will be posted Friday explaining the district's budget situation, state law governing school budgets and how it plans to get on firm financial footing again. The website will be frequently updated with meeting recaps and documents, and the district will hold four town hall sessions.

"Our goal is transparency," Mayo said.

He explains to residents in the video that it is a rainy day in Allentown, but if they do the right things now, the sun will shine again. He emphasized Allentown did not overspend; it is a victim of the economy and it must right-size its operations.

The district has tapped its rainy day fund so many times in recent years it has shrunk from $25 million to a projected $3.9 million, Mayo said. It means that Allentown can't balance its budget just by tapping reserves. The district expects to have no savings left by next year.

To reverse this trend, the district is going to look at painful cuts, Mayo said.

But it is taking proactive steps to try to bring in revenue, Mayo said. The district hopes to expand its online Allentown School District Virtual Academy to offer more courses for students, including Advanced Placement, he said.

Mayo hopes to stem the exodus of students to cyber and charter schools and bring that money back into the district. With charter schools, the funding follows the child and Allentown is paying out $19.6 million this year.

The district is also crafting partnerships -- focusing on engineering, leadership and health sciences -- with the businesses coming into the downtown as part of the new Allentown hockey arena and Neighborhood Improvement Zone. Mayo declined to elaborate, saying plans were still in the works.

The district does not yet have a deal with Allentown teachers to expand the virtual academy.

"This isn't anything that's a surprise," Tretter said following the finance committee meeting. "We've heard the same schtick for the past three, four years. I just feel you can't get a straight story."

Tretter disputed Mayo's assertion that all the teachers have been recalled. Many are in long-term substitute positions, she said.

Mayo
could not distinguish between long-term sub jobs and full-time teaching
positions and conceded Treeter may be correct. But those teachers will
be hired to fill any vacancies and they are working, not collecting
unemployment, Mayo said.